53

And the Best Blue Chip for 2007 Is .

That was the Associated Press headline that prompted us to try to figure out last week exactly which blue chips were shaping up to be the next big thing. And we needed your help.

Even while many of us were suffering from democracy hangovers, we asked you, the individual investor, to read our analysis of 21 candidates and then to make your thoughts known in our Motley Fool CAPS database. If you agreed with the analysis, you rated the stock "outperform" in CAPS. If you disagreed, you rated it "underperform." We promised that the blue-chip stock with the most new, net outperform ratings (outperform ratings minus underperform ratings) would win the contest. Now, we have our winner.

Drumroll, please .So, without further ado, the Best Blue Chip for 2007 is .

Really?Now, I agree that Apple may seem like an odd choice for best blue chip. After all, Apple does not yet pay a dividend, trades for a rather pricey 37 times earnings, and has been an extremely volatile stock over the trailing 20-year period despite its outstanding performance.

But remember the thesis behind our research: The face of blue chips is changing.

As Katrina Chan wrote in her analysis of the company, "Apple is the dominating force in the digital-music world with iTunes and the iPod. And Apple is gaining market share in the U.S. PC market." Moreover, she pointed out, with the potential for an iPod phone or an iTunes for movies, Apple's dominant positioning and growth potential are both here to stay.

That kind of competitive advantage and bulldozer growth is precisely what makes a great blue chip such a powerful addition to your portfolio.

Old-economy runners-upWhile one-time tech wunderkind Microsoft (Nasdaq: MSFT) finished second in the Best Blue Chip for 2007 voting, we might as well group it together with the old-economy stalwarts that round out the top five: oil refiner Valero Energy (NYSE: VLO) , health-care icon Johnson & Johnson (NYSE: JNJ) , and consumer-products kingpin Procter & Gamble (NYSE: PG) .

After all, none of these companies (or stocks) generates the same kind of buzz that Apple does, nor can they match its price tag or 20% five-year growth estimate. In other words, all four are more traditional blue-chip candidates. So if you're unsure about anchoring your portfolio to Apple, consider checking out the rest of our analyses or what fellow investors are saying about these stocks in Motley Fool CAPS.

Thanks to all those who voted, and congratulations to the good people at Apple. We love your new ad campaign.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.